Page 9 - Banking Finance May 2022

RBI CORNER

mobile phone number through card- vices as well as servicing existing finan- launching a facility for manufacturing
less cash withdrawal. The beneficiary cial products and services digitally in specialised currency ink.
can then withdraw cash from the ATM self-service mode at any time, all year The governor inaugurated Varnika, the
without using a debit or an ATM card," round, the RBI said. ink manufacturing unit of Bharatiya
said Adhil Shetty, chief executive of- Commercial banks (other than RRBs, Reserve Bank Note Mudran
ficer, Bankbazaar.com. payment banks and LABs) with past (BRBNMPL), a subsidiary of the central
digital banking experience are permit- bank. He emphasised the importance
RBI guidelines on Digital of continuously building capacity, re-
ted to open DBUs in tier 1 to tier 6
banking unit norms centres, unless otherwise specifically search & development and innovation

RBI released the guidelines on estab- restricted, without having the need to to achieve 100% self-sufficiency in
banknote manufacturing soon.
lishment of digital banking units (DBUs) take permission from the RBI in each
after Finance Minister Nirmala case, the central bank added. Varnika can manufacture 1,500 metric
tonnes of specialised ink, which en-
Sitharaman, in her Budget speech for
hances the security features of
fiscal 2022-2023, had announced set- India nears self-reliance in
ting up of 75 DBUs in 75 districts to banknotes. "It is a boost to the 'Make
in India' initiative. It ensures that the
commemorate 75 years of indepen- banknotes, says RBI gover- entire requirement of banknote print-
dence of the country. nor ing inks is produced in-house. This unit
DBU is a specialised fixed point busi- RBI governor Shaktikanta Das said that also manufactures Colour Shift Intaglio
ness unit or hub housing certain mini- the country has made substantial Ink (CSII) and meets all the require-
mum digital infrastructure for deliver- progress in achieving self-sufficiency in ments of banknote printing presses in
ing digital banking products and ser- the production of banknotes while India, which has resulted in cost-effi-
ciency and self-sufficiency in banknote
RBI permits banks to outsource e-banking units ink production," the RBI said in a
statement.
The RBI has announced guidelines for banks to set up specialised digital bank-
ing units (DBUs) distinct from regular bank branches using the outsourced
model. The new norms are in line with a Budget announcement and are based RBI imposes restrictions
on the recommendation of a panel comprising members of the RBI and bank- on Indian Mercantile Co-
ing industry.
operative Bank Ltd
"Scheduled commercial banks (other than regional rural banks, payment
banks and local area banks) with past digital banking experience are permit- The Reserve Bank said it has imposed
ted to open DBUs in tier-1 to -6 centres, unless otherwise specifically re- several restrictions on Indian Mercan-
stricted, without having the need to take permission from the RBI in each tile Cooperative Bank Ltd, Lucknow,
case," the central bank said. including a cap of Rs 1 lakh on with-
drawals.
The RBI said that banks are free to adopt either an insourced or outsourced
model for operations of the DBUs. These are also allowed to use application The restrictions came into force from
programming interfaces (APIs) to connect with external third-party app pro- closure of business hours on January
viders. However, these apps have to be tested in an isolated environment 28, 2022.
before being integrated with the bank's systems. In a statement, RBI said the Lucknow-
based co-operative bank will not, with-
The minimum bouquet of products that the DBUs are expected to provide
out its prior approval, grant or renew
include account-opening kits, digital kits for mobile banking, internet bank-
ing, debit cards, credit card and mass transit system cards. In her Budget any loans and advances, or make any
speech, finance minister Nirmala Sitharaman had said that to ensure that investment.
benefits of digital banking reach every nook and corner of the country in a "In particular, a sum not exceeding Rs
consumer-friendly manner, it is proposed to set up 75 DBUs in 75 districts by 1 lakh of the total balance across all
scheduled commercial banks. savings bank or current accounts or any

BANKING FINANCE | MAY | 2022 | 9